Treasurer to reveal dire state of Tassie’s finances inherited from Labor-Greens

Treasurer Peter Gutwein says the legacy of the Labor-Green government is that Tasmania has been left with a $1.1 billion budget black hole.Source: News Corp Australia

TREASURER Peter Gutwein will today unveil a $1.1 billion black hole in the State Budget.

The new Liberal Government’s first Budget update and a “risks report” compiled by Treasury are expected to highlight the dire state of the Government’s finances.

Mr Gutwein yesterday said the report would show just what his Government had inherited from the Labor-Green government.

“We have promised to fix the Labor-Green budget mess. Tasmanians elected us to do that, and that is what we will do,” he said.

“The legacy of the Labor-Green government is that Tasmania has been left with a $1.1 billion budget black hole, rising debt and rising interest payments that, if not addressed, will rob Tasmanians of the basic services they need,” he said.

The updated figures show the state’s net deficit as $1.1 billion over the predicted forward estimates — $200 million worse than was unveiled before the March 15 state election.

The report also shows net debt will rise to more than $400 million by 2016-17, and predicts a further loss of $270 million in GST receipts and mineral royalties over the period to 2017-18.

Mr Gutwein said the State Government would not break any of its election promises in order to get the state’s finances back on track.

“One of the Government’s key priorities is to return the Budget to a sustainable position, which is why the Government requested the ‘risks report’ — to provide an update on the Budget and to provide a more detailed assessment of the risks, which were highlighted in the revised estimates report released in February by the Labor-Green government,” he said.

The Government has yet to show how it will generate $500 million in savings measures the Liberals outlined before the election.

Last week the union representing public sector workers and the business lobby called on Mr Gutwein to provide more detail on where the State Government intended to find the savings.

Today’s report comes as the new CommSec “State of the States” report showed Tasmania still locked at the bottom of Australia’s economic performance table, lagging behind other economies in five of the eight key indicators.

The report showed economic activity in the state in the December quarter was 5.1 per cent above its decade average
compared with the Northern Territory, which was almost 52 per cent above its decade average.

Mr Gutwein said Tasmania’s performance was more evidence of the “abject failure” of the former government.

“The Liberal Government is … delivering our long-term plan for the future of Tasmania,” he said.

“We understand that there are no silver bullets and that we don’t have all the answers.”

Comments on this story

David Dobbin of Launceston Posted at 9:39 PM April 28, 2014

A budget 'black hole' is an unexpected shortfall in public funds...... this one was entirely expected, forecast by Labor in the budget papers..... the Libs should not be surprised by it. The shock is that we now discover that the Libs' election promises were made with no reference to the budget situation - $500m in 'savings', $341m in election promises including more public servants in education, police, Treasury, and the 'red and green tape' department,' and not an item of detail in any of their policies. The only black hole in all this is the one Gutwein is about to fall into when he can't make the sums add up. The lazy politics of opposition have now become the impossible reality of government for the Libs. And it's no good us saying 'we told you so...'

Karl Stevens of Beaconsfield Posted at 6:26 AM April 28, 2014

Strange how English-born Tony Abbott idealises everything British except having tax havens like the Channel Islands? We even have a 'channel' with islands in it that Peter Gutein could use as the 'tax havens of Oceania.' Sad the Liberals are only using half their brains isn't it?

Karl Stevens of Beaconsfield Posted at 6:22 AM April 28, 2014

Why don't conservatives like Abbott and Gutwein do what their heroes in Britain do - have Channel Island tax havens? Tasmania is ideally placed to become the 'tax haven' of Oceania. Liberal conservatives slavishly copy everything else about Britain and the US except those things that would make Tasmania better.